2) (a) The Excise duty payable on finished goods is accounted for on clearance of goods from the Factory. The amount of Excise duty payable on finished goods not cleared from factory as on the above date is estimated at Rs. 196,892/- (Rs. 196,892).

(b) Interest on Excise duty payable of Rs 531,300/- (Rs 483,000/-) has. not been provided for.

(c) Property tax has not been provided for Rs 698,169/- (PY Rs. 630,418/-)

3) In the opinion of the management, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business except otherwise stated. The provision for all known liabilities is adequate and not in excess of the amount deemed necessary. There are no contingent liabilities other than those stated above.

4) a) The Non Convertible Debentures of UTI are to be secured by equitable mortgage of the Company's immovable properties, and by way of hypothecation of plant and machinery and aft movable properties, (first charge) both present and future (save and except book debts) subject to the prior charges created/to be created in favor of the company's banker's on Its raw materials, finished goods and consumable stores for securing borrowings for working capital requirement, the said charge shal rank pari passu-wkh the existing charge holders. Trust deed and the charge on the said assets are not created.

b) The debentures shown under secured loans have become due for redemption on May 18, 1998, along with premium of 5% of face value. Management has approached UTI tor a rollover. Therefore, the same has been showp under the head short term borrowings in current liabilities as secured loan. However, due to this secured loan is overstated to that extent Confirmation from UTI in respect of rollover of debentures is st#l awaited.

c) Provision of penal interest due to non-payment of principal along with a premium of 5% has not been made as the Company has requested UTI for waiver of the same. Amount not being ascertained, the same will be accounted for as & when settled. On account of this, the profit for the year Is overstated.

d) On account of the ongoing one time settlement talks going on with UTI, interest of Rs 18.75 lacs (PY Rs 18.75 lacs) for the year under review is not provided for as the management is hopeful that the interest would be waived off. Due to this, loss for the year is understated. Total accumulated non provision of interest is Rs 307.45 lacs (PY Rs 288.70 lacs).

e) Provision for interest on premium of Rs 625,000/- payable to UTI has not been made as the company has requested UTI lor waiver of the same. Due to this the toss for the year is understated by Rs 93,750/- and secured loans is also understated to that extent Accumulated Interest Rs 15,00,000/- has not been provided for.(PY Rs 14,06,250)

5) Sundry Debit, credit balances and secured loans from UTI and banks are subject to confirmation, reconciliations and adjustments, required, if any.

6) Loans and advances include doubtful advances of Rs 581,279 (Rs. 611,279). However, no provision has been made.

7 a) Bankers of the Company have filed suit against the company for recovery of their dues with the Debt Recovery Tribunal. Adjustment, if any, will be accounted for as and when, settled. Therefore, the stone has been shown under the head short term borrowings In current liabilities.

b) In view of the on-going one time settlement talks with the bankers, the company has not provided interest on the working capital facilities amounting to Rs 171.88 lacs (PY Rs 171.88 lacs), as the management Is hopeful that interest would be waived off. Due to this, the loss is understated to that extent. Total accumulated non provision of interest is Rs 2723.20 lacs (PY Rs 2551.32 lacs)

c) The Company hasnot provided penal interest and interest on interest accrued and due as the Company is in the process of negotiating with the bankers to waive the same off. The same if any payable, in future shall be accounted for as and when settled.

d) Security against the working capital facility is Rs 409.83 lacs as against foe total working capital of Rs 1053.26 lacs. Hence the secured loan is unsecured to that extent

e) The Hon'ble Board for industrial and Financial Reconstruction (B1FR), New Delhi in furtherance to their earlier directions In the hearing on 12* March 2012 ruled and directed that the Company is permitted to sell itssurplus assets to settle its secured creditors and statutory liabilities. The Bench of the Hon'ble BIFR accordingly directed Canara Bank (Operating Agency) to constitute an Asset Sales Committee (ASC) to sell the Company's surplus assets at Tarapur and Daman. The Operating Agency floated a tender for sale of the two properties. The ASC received a total of 5 (five) bids and at the hearing of Hontrie BIFR held on 15 April 2013, the Hon'ble BIFR directed the Company and the Operating Agency to accept the highest bid received for Rs 270 lacs. Hon'ble BIFR further directed that the sale proceeds of Rs. 270 lacs be utilized a) to meet al the statutory liabilities of the company, b) the cost incurred by Operating Agency in issuing advertisement and c) the cost of valuation done by ARGIL The balance left with to be shared by all the secured lenders on a pro rata based on the liability outstanding on a common date. The Company has accordingly identified the following statutory dues 1) Employee dues Rs 53.85 lacs 2) Excise dues Rs 14.75 lacs 3) Sales tax dues Rs 1.71 lacs 4) Electricity Exps Rs 2 lacs, water & Fire cess Rs 2.10 lacs, Transfer charges Rs 7.83 lacs and security charges Rs 0.55 lacs relating to the above properties sold 5) Service tax dues Rs 0.24 lacs 6) Profession tax dues Rs 0.08 lacs 7) Stock Exchange and STA dues Rs 4.70 Lacs 8) SICOM dues Rs 3.30 lacs 9) Consumer forum cases Rs 2.62 lacs 10) Capital Gain tax arising on the sale of properties-Rs 65 lacs.

f) The Company has had to prefer an Appeal before Hon'ble AAIFR as the lenders have taken a contrary view than agreed upon earlier and have taken a stand that Capital Gains Tax and such similar liabilities are not statutory in nature and hence should not be paid from the sale proceeds of Rs 270 lacs. Their other contention is that once the balance Sale proceeds are shared amongst the lenders, the settlement would not be full and final but only part settlement of dues; a stand which is contrary to the understanding reached earlier and hence the Appeal. The matter is presently before the Hon'ble AAIFR. The Company continues to hold possession of the said assets. Necessary accounting effects shall be given in the books at the time of final settlement.

g) inventories of finished goods. Raw materials and Spares include value of old / slow moving stocks Of Rs. 401 lacs; the realizable value of this stock Is estimated at Rs. 1 lac by the management However, no provision for the loss of Rs. 400.00 Lacs Is made during the year. Further valuation of these inventories is not in accordance with AS 2- Valuation . of Inventories issued by ICAl.

(b) The Company is of fire opinion that computation of net profit u/S. 35Q of The Companies Act, 1956 need not be made since no commission is payable to the Whole time Director (or the year ended March 31st, 2014.

8) Deferred Tax: - In view of the applicability of Accounting Standard 22, Accounting for Taxes on Income for the year, the company does not have current tax as well as deferred tax BabHHy due to carry forward losses. In the opinion of the 1 Management, deferred tax asset is not recognized in view of the uncertainty of future taxable profit.

9) Segment Reporting: -

a. Business Segment: - The Company is primarily engaged in the business of selling and servicing office automation products. As the sales and the after sales service forms the part and parcel of the same business activity, the 1 management has considered both the sales and after sale service as one segment only.

b. Geographical Segment - The Company sells the office Automation products within India and also does the after sales service of the office Automation products in India only. The Condition prevailing in India being uniform, no separate geographical segment disclosure is considered necessary.

10) The Management had in earlier years carried out assessment of impairment test as per the Accounting Standard (AS) 28 and have provided for impaired loss in the books. However, no such impairment is carried out in the current year.

11) Related Party Disclosure: - Transactions made by the Company during the year with related parties is disclosed pursuant to Accounting Standard 18 on Related Party Disclosures issued by the ICAl Is given here under. Related party relationship is as identified by the Company and relied upon by the Auditory ''

12 Contingent liabilities                 As at              As at
(to the extent not provided for)     31 March, 2014     31 March, 2013

(a) Claims against the Company not
acknowledged as debt                     24,863,538         25,028,538

(c) Disputed Sales tax Liability          4,021,385          4,021,385

13) Previous Year figures have been regrouped, rearranged, and recasted wherever necessary on account of the changes required in the new format under schedule VI of The Companies Act, 1956.

14) Figures within the brackets for previous year.